NextEra Energy, Inc. (NEE) Intrinsic Value & DCF Valuation
Regulated Electric · NYSE
Current Price
$85.99
Intrinsic Value
Outside reliable range
What Is NextEra Energy, Inc.'s Intrinsic Value?
Our base-case DCF model produces an intrinsic value estimate for NextEra Energy, Inc. (NEE) that falls outside the range we consider reliable, so treat any single number with extra caution. This usually happens with unusual cash flow patterns or rapid recent changes in the business.
How our DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is NextEra Energy, Inc. (NEE) Undervalued?
Because the model output for NEE is outside our reliability range, we do not give an undervalued or overvalued read here. Use the calculator below to test your own assumptions instead.
COMPETITIVE MOAT
↑Regulated Monopoly Power
NEE operates as a regulated utility in Florida, granting it a de facto monopoly. This allows for predictable revenue streams and cost recovery, insulating it from direct competition.
↑Scale in Renewable Development
The company's massive scale in renewable energy projects provides significant cost advantages and expertise. This makes it difficult for smaller players to compete in large-scale clean energy buildouts.
↑Customer Base Growth
NEE is experiencing a growing customer base, particularly in its Florida operations. This organic growth provides a stable foundation for future earnings and investments.
INVESTMENT RISKS
↓Interest Rate Sensitivity
As a capital-intensive utility, NEE is sensitive to rising interest rates. Higher borrowing costs can impact profitability and the attractiveness of its dividend.
↓Regulatory Uncertainty
Changes in regulatory frameworks or unfavorable rate decisions can negatively affect NEE's earnings. The 'defensive utility trade is breaking' suggests increased scrutiny.
↓Hurricane Preparedness Costs
The start of hurricane season poses a risk of significant storm damage and associated repair costs. While FPL is prepared, major events can strain resources and impact earnings.
Base case
NEE base case valuation
Base case assumptions: 8.3% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the NEE valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for NextEra Energy, Inc. respond.
Open DCF Calculator for NEECompany Overview
NextEra Energy, Inc., operating through its diverse subsidiaries, is a prominent electric power provider in North America. The company's operations encompass the generation, transmission, distribution, and sale of electricity to both individual consumers and large-scale wholesale clients. Its energy portfolio is broad, featuring power generation from wind, solar, nuclear, coal, and natural gas facilities. Beyond direct power supply, NextEra Energy is actively involved in developing, constructing, and managing long-term contracted clean energy infrastructure, including renewable energy generation sites, battery storage solutions, and electric transmission networks. The firm also participates in the sale of energy commodities and oversees the development, construction, and operation of generation assets within competitive wholesale energy markets. As of December 31, 2021, NextEra Energy boasted a net generating capacity of approximately 28,564 megawatts. Its extensive infrastructure included about 77,000 circuit miles of transmission and distribution lines and 696 substations. Within Florida, the company delivers electricity to roughly 11 million individuals, serving approximately 5.7 million customer accounts across the state's eastern and lower western coastal regions. Founded in 1925, the company adopted its current name, NextEra Energy, Inc., in 2010, having previously operated as FPL Group, Inc. Its corporate headquarters are located in Juno Beach, Florida.
Financial Metrics — NEE Stock Valuation Data
Revenue/Share (TTM)
$13.49
FCF/Share (TTM)
$1.13
ROIC (TTM)
4.0%
ROE (TTM)
15.2%
P/FCF
75.9x
EV/EBITDA
16.4x
FCF Yield
1.32%
Debt/Equity
1.89x
Based on trailing twelve-month data, NEE shows a free cash flow per share of $1.13 and a ROIC of 4.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 75.9x and FCF yield of 1.32% are important context metrics when evaluating NEE's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of NEE?
NextEra Energy, Inc. currently generates $1.13 in free cash flow per share. At the current price of $85.99, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is NEE undervalued?
NEE trades at a P/FCF ratio of 75.9x with a free cash flow yield of 1.32%. This elevated P/FCF suggests the market is pricing in significant future growth. However, whether NEE is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value NEE stock using DCF?
To perform a DCF valuation on NextEra Energy, Inc.: (1) Start with the trailing free cash flow per share ($1.13) as the base, (2) project future FCF growth over 5-10 years based on Regulated Electric industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting NEE's risk profile — with a debt-to-equity of 1.89x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to NEE?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For NextEra Energy, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Regulated Electric trends, then discounting those amounts to today's dollars. NEE's ROIC of 4.0% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect NEE stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For NEE, with a debt-to-equity ratio of 1.89x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 16.4x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See NEE PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Utilities valuationsDCF and P/E value NEE with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.